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Oops. IRS quarterly payments were due 9/15
Old 09-17-2009, 05:41 PM   #1
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Oops. IRS quarterly payments were due 9/15

If you are FIREd you likely make quarterly I.R.S. payments. If you are like me it slips your mind.
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Old 09-17-2009, 05:43 PM   #2
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i set an alarm last year about this time and have set 1 for next year now
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Old 09-17-2009, 05:47 PM   #3
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Fortunately (I think) the only "penalty" is interest for being late so if only a few days, not so big a deal.
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Old 09-17-2009, 05:51 PM   #4
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Being new to quarterly payments, I sent mine in a couple of weeks ago.

I'm sure I'll get more cavalier about it after a few years!
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Old 09-17-2009, 06:30 PM   #5
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I've been making quarterly payments for 40 years. I use a calendar to help me- formerly a daily planner but now an online version.

Ha
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Old 09-17-2009, 06:46 PM   #6
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I have each quarter set up as an annual scheduled payment in Quicken so I get reminded 15 days in advance.

It's also in my computer calendar for every year. That notifies me too. That's the easiest way to deal with it - haven't missed one yet in the last 10 years!

W2R - check out eftps.gov. That way you don't have to "send" anything, just schedule a withdrawal for the day due.

Sometimes we remind each other on the forum. I'll try to do that more often, but don't count on me!

Audrey
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Old 09-17-2009, 06:50 PM   #7
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Thank you, Audrey!! That is EXACTLY what I need. Much appreciated.
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Old 09-17-2009, 06:53 PM   #8
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Thank you, Audrey!! That is EXACTLY what I need. Much appreciated.
It takes a few weeks to get enrolled, but it is very easy after that. I made my first payment on the 15th. I've got a reminder set up on a calendar program I use.

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Old 09-17-2009, 06:57 PM   #9
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Thank you, Audrey!! That is EXACTLY what I need. Much appreciated.
It's super convenient once it is all set up. And you can schedule things as late as the day before, which is wonderful.

Audrey
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Old 09-17-2009, 07:13 PM   #10
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...
W2R - check out eftps.gov. That way you don't have to "send" anything, just schedule a withdrawal for the day due.
...
But don't wait until the last minute. It can take a couple of weeks to do the initial setup. Works great.
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Old 09-17-2009, 08:10 PM   #11
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This is my first year of ER and I have a couple of questions on estimated taxes

1. Do I have to pay estimated taxes even if my distributions TO DATE are below the income levels that are taxed?

2. If I plan to make a transfer from my IRA to a ROTH later this year, do I have to pay estimated taxes on that amount now?

Any advice is much appreciated. And thanks for bringing this topic up.
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Old 09-17-2009, 09:20 PM   #12
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Uh-oh, I guess the post office lobby will be the first order of business tomorrow morning. Do you think a smiley-face sticker on the envelope will have any leverage?
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Old 09-17-2009, 09:28 PM   #13
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W2R - check out eftps.gov. That way you don't have to "send" anything, just schedule a withdrawal for the day due.

Audrey
I recc that also. You still need a reminder to have the balance available in the account though. Something about bouncing a check to the Feds that made me very nervous!


-ERD50
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Old 09-17-2009, 10:01 PM   #14
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This is my first year of ER and I have a couple of questions on estimated taxes

1. Do I have to pay estimated taxes even if my distributions TO DATE are below the income levels that are taxed?

2. If I plan to make a transfer from my IRA to a ROTH later this year, do I have to pay estimated taxes on that amount now?

Any advice is much appreciated. And thanks for bringing this topic up.
Technically you are supposed to make 4 payments based upon your estimated income (and projected tax) for the year. The IRS likes to get paid as soon you do. However, if you have an unexpected taxable event just pay the tax at next quartly due date and you should be OK. The more you make and owe in taxes the more the IRS looks at you IMO.
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Old 09-18-2009, 12:13 AM   #15
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If you are FIREd you likely make quarterly I.R.S. payments. If you are like me it slips your mind.
Just send in the check ASAP and when you fill out your return put it down that it was paid on 9/15... I had been told there is a few days 'window' for a payment being pegged as late...

If they do put it down as late... you might pay some penalty for late payment... try and figure out the rules for doing the penalty... you might be able to get around it by paying more on 1/15 and not have to figure it out quarterly.... (this is just thinking outside the box.... I have not done taxes in 25 plus years except mine and my boss)....
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Old 09-18-2009, 07:40 AM   #16
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I recc that also. You still need a reminder to have the balance available in the account though. Something about bouncing a check to the Feds that made me very nervous!


-ERD50
Well of course! I never schedule the payment until I've made sure sufficient funds will in be the bank account on that date.
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Old 09-18-2009, 07:46 AM   #17
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Originally Posted by walkinwood View Post
This is my first year of ER and I have a couple of questions on estimated taxes

1. Do I have to pay estimated taxes even if my distributions TO DATE are below the income levels that are taxed?

2. If I plan to make a transfer from my IRA to a ROTH later this year, do I have to pay estimated taxes on that amount now?

Any advice is much appreciated. And thanks for bringing this topic up.
You do not have to pay estimated taxes until you actually realize the income. So, when you take an action, the taxes are due after the close of that quarter. Estimated taxes due on actions taken the rest of this year aren't due until Jan 15 of 2010.

Question 1 - you really need to read the IRS publication on the topic. It's an easy read. There is a concept of "annualized income" whereby the income received in the 1st quarter is multiplied by 4 to calculate taxes due, and then you pay slightly less than a quarter of the taxes on that annualized amount. The subsequent quarters are similarly pro-rated. That can push income into a higher tax bracket at first.

Audrey
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Old 09-18-2009, 09:20 AM   #18
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Thanks Audrey. I spent some time reading up on estimated taxes last night. I don't quite associate "easy read" with IRS documents

I also have to re-read the threads on IRA to ROTH transfers. For those interested, here are two threads on the bogleheads board.
Bogleheads :: View topic - Roth IRA conversion
Bogleheads :: View topic - The mechanics of Traditional IRA to Roth IRA transfers
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Old 09-18-2009, 09:36 AM   #19
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IRS Site

Th IRS has a wonderful web site. Can schedule payments up to a year in advance. No charge. Great for travel, scheduling quarterly payments, etc. Has really simplified my life.

https://www.eftps.com/eftps/
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Old 09-18-2009, 10:19 AM   #20
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Thanks Audrey. I spent some time reading up on estimated taxes last night. I don't quite associate "easy read" with IRS documents
IRS 2009 Form 1040ES instructions answer some of your questions, especially the "Who Must Make Estimated Tax Payments" question (if you expect to owe at least $1000 in tax for 2009 that won't otherwise be withheld - but definitely review the details). It has the relevant tax tables, etc. http://www.irs.gov/pub/irs-pdf/f1040es.pdf

Publication 505 is the more comprehensive one - the "bible". It's really pretty straightforward and includes some very useful examples. It doesn't get updated as quickly as the 1040ES form for new year tax tables, etc. http://www.irs.gov/pub/irs-pdf/p505.pdf

Audrey
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